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Fair Credit Reporting: 12.1.3.3.1 Introduction

Much of the discovery available and regularly sought in litigation against CRAs is also available from creditors, debt collectors, and other furnishers. The advice to practitioners suggested above applies equally to claims against furnishers. In addition, furnishers may have discoverable recordings of conversations with the plaintiff.123

Fair Credit Reporting: 12.1.3.3.2 Discovery concerning consumer disputes

As in litigation against CRA defendants, when prosecuting a furnisher case, practitioners should seek discovery from the specific employees that received and processed the consumer’s disputes. For furnishers, the dispute process may include earlier direct communications from the consumer as well as ACDV disputes made through the “Big Three” nationwide CRAs.

Fair Credit Reporting: 12.1.3.3.3 Discovery of furnisher relationship to CRA

Discovery should be sought regarding the relationship and business history between the furnisher and important credit reporting industry entities. Every furnisher will have a subscriber agreement between it and each “Big Three” CRA. In addition, there will be related correspondence with the CRA and billing records sent to the furnisher that detail the volume of reporting and credit report purchases involved. The CRAs also provide various training tools or documents related to the products they sell.

Fair Credit Reporting: 12.1.3.4 Discovery from Employers and Other Users

Employers are required to provide a notice to job applicants and employees before taking any adverse employment action based, even in part, based on a consumer report.143 In a class action alleging an employer’s failure to comply with this requirement, the plaintiff will need to conduct discovery regarding terminations and rejections of job applicants.

Fair Credit Reporting: 12.1.3.5 Discovery Regarding Willfulness

If willfulness is alleged in the action, and the court has not found that the defendant’s reading of a controlling statutory provision was “objectively reasonable,” the subjective intent of the defendant should be explored by counsel in discovery. Intent is not, in this context, rendered irrelevant by the holding in Safeco Ins. Co. v.

Fair Credit Reporting: 12.1.3.6 Document and Electronic Data Preservation

Upon commencing litigation, if not before, practitioners should send a letter to opposing counsel requesting preservation of specified categories of current and ongoing data that ultimately will be requested in discovery. The case law is clear that each party has a duty to preserve unique, relevant evidence that might be useful to an adversary. Issues regarding the scope of the duty to preserve documents and electronically stored information (ESI), as well as costs associated with doing so, arise most frequently in the context of class actions.

Fair Credit Reporting: 11.2.3.3.7 Offers of judgment or settlement to the class representative

As with any putative class action that threatens a defendant with substantial liability, the defendant may make an individual offer of judgment161 or settlement to the proposed class representative in an attempt to moot their claim prior to certification of a class. In many instances, the offer is inadequate to satisfy even the class representative’s individual claim, in which case it will not moot that claim, let alone the class action.162

Fair Credit Reporting: 3.1.1 Overview

This chapter details how to obtain and examine a report of a consumer’s file kept by a consumer reporting agency (CRA).1 The chapter describes what information is generally in a file,2 the consumer’s right to a free or low-cost report of the contents of that file,3 and the mechanics of obtaining that report.4 The chapter also examines what information from the file must be reported to the consumer,

Fair Credit Reporting: 16.4.5.1 Generally

There will likely be significant variations in the credit scores provided by the three CRAs. One reason for this variation is that the information in a consumer’s file is different for each CRA. Another reason is that the credit score products sold by TransUnion and Experian may be based on their own in-house educational scoring system, on the VantageScore scoring system, or on the FICO scoring system.171 The existence of so much variability in credit scores can create confusion and frustration for consumers.

Fair Credit Reporting: 3.1.2 Reasons to Obtain Disclosure of a Consumer’s File

There are many reasons why a consumer or the consumer’s attorney would want to examine the consumer’s credit file. Consumers can review a report of the file contents to determine if there is inaccurate or incomplete information. Understanding the nature of negative information in the file also is an aid to improving the consumer’s credit profile. Disclosure of the consumer’s file is an essential first step to handling almost any problem relating to a consumer’s credit file and consumer reports related to the file.

Fair Credit Reporting: 3.2.1 Investigative Reports Distinguished From Consumer Reports

Information in consumer reports is generally not obtained through personal interviews with friends, neighbors, business associates, or other third parties. If a consumer report contains any information obtained through an interview (whether in person or over the telephone), then the report is an investigative consumer report, a special type of consumer report to which additional procedures apply.

Fair Credit Reporting: 3.2.3.1 Generally

Each of the “Big Three” nationwide consumer reporting agencies operating in the United States, Equifax, TransUnion, and Experian (formerly TRW), keep files on about 200 million Americans.29 The information held in consumer files is updated constantly.

Fair Credit Reporting: 2.3.3.1 Generally

A consumer report is one “bearing on a consumer’s credit worthiness” and other factors.53 Consumer is defined in the FCRA as an individual54 and must, at a minimum, be “an identifiable person.”55 Therefore, a report on an anonymous computer username may not be a consumer report.56 One court held that a file that contains information on several persons who share a common name and state, and that does

Fair Credit Reporting: 3.2.3.2.2 Identification or “header” information

Personal identification information includes the consumer’s name (and aliases), current and previous addresses, and Social Security number. Files may also contain dates of birth, present and previous employment information, telephone numbers, and a spouse’s name. This is sometimes known as “header” information.

Fair Credit Reporting: 3.2.3.2.3 Credit Account or “tradeline” information

The credit account information or “tradelines” detail the consumer’s payment history with certain creditors, including mortgage, auto loans, installment loans, credit cards, and retail store cards. For each creditor, the file contains the creditor’s name. The file also indicates whether the account has been sold to another creditor or whether another party is involved other than the nominal creditor. For example, the file might state “Walmart/Capital One” The average credit file contains thirteen past and current credit accounts.34

Fair Credit Reporting: 3.2.3.2.4 Public record information

Public record information will be listed in a separate part of a report, obtained from public court files or other governmental sources. Public record information is always negative, such as tax liens, bankruptcies, court judgments (including default judgments), and foreclosures.

Fair Credit Reporting: 3.2.3.2.5 Inquiries

A consumer report will show “inquiries,” i.e., records of users who have requested the report within the last two years for employment purposes and within the past year for other purposes, such as applications for credit.55 There are two general types of inquiries: “hard” and “soft” inquiries.56 However, with one exception,57 this distinction is not set forth in the FCRA,58 but is instead a matter of industry

Fair Credit Reporting: 3.2.3.2.6 Other information

Reports sent to users (but not to consumers, unless specifically purchased) will also include a “credit score” or a numerical rating of a consumer’s so-called creditworthiness.66 This score is based on information in the report, which is tabulated according to formulas that vary for different CRAs and even different creditors.

Fair Credit Reporting: 3.2.3.3 Sources of Information in the File

The “Big Three” nationwide consumer reporting agencies obtain their information from three primary sources. First, they obtain the bulk of their information from furnishers,70 mostly creditors and others who provide current account information, generally on a monthly basis, in electronic format. Furnishers include banks, other lenders, retailers, insurers, landlords, and others. These entities are usually “subscribers” who both obtain consumer reports from the CRA, and regularly send the CRA information on the accounts of customers.

Fair Credit Reporting: 3.2.4 Information Found in Files at More Specialized Reporting Agencies

Specialty CRAs obtain a specific type of information on a consumer for particular purposes. One example is tenant screening services such as RealPage’s LeasingDesk product, marketed to landlords for use in considering prospective tenants.78 Information is culled from housing court and small claims court docket sheets, criminal court docket sheets, other CRAs, and third-party vendors.

Fair Credit Reporting: 11.3.5.2 Requirement for CRAs to Provide File Disclosures to the Consumer

One of the bedrock requirements of the FCRA is the consumer’s right to obtain a disclosure of the information in their files at a CRA. Section 1681g(a) requires CRAs “to clearly and accurately disclose all information in the consumer’s file” upon request, including the “sources of information.” The Supreme Court in Ramirez held that the provision of faulty disclosures in violation of § 1681g that are “formatting errors” alone is not sufficient for standing.331

Fair Credit Reporting: 3.4.2.1 Deceptive Promotion

The manner in which these credit monitoring products are sold has been questionable at best, and deceptive at worst. They are often promoted as “free” which seems inherently deceptive, and led to Congress adopting a mandatory disclosure for websites advertising free credit reports.329 Consumers also have reported difficulties in canceling the service or getting refunds.330